India plans early launch of UPI payment system with Sri Lanka

Sri Lanka currently continues operations of the payment and settlement systems to achieve significant growth in digital transactions in 2024, a Central Bank policy statement divulged.

With a view to develop the payment and settlement regulatory framework, the Central Bank aims at revising the Payment and Settlement Systems Act, No. 28 of 2005 (PSSA) and enacting the new PSSA in 2025, to facilitate the rapid expansion of payment innovations.

Further, the Central Bank is to revise regulations to support the expansion of digital payments and to revise the existing regulatory framework to facilitate more FinTechs entering in the coming years.

In terms of strengthening the retail payment infrastructure, LankaPay (Pvt) Ltd (LPPL), under the guidance of the Central Bank, will be developing the Government Digital Payment Platform (GDPP) via the LankaPay Online Payment Platform (LPOPP), to enable government institutions to receive payments digitally from the public, the statement said.

Under this set up, Sri Lanka and India joined hands to fast track an early roll-out of the Unified Payments Interface (UPI) system with a view to enhance bilateral economic cooperation significantly, State Finance Minister Shehan Semasinghe said.

He revealed this new development in digital payments at a meeting with Indian High Commissioner to Sri Lanka, Santosh Jha recently.

The high-level discussions, held in Colombo, transpired India's steadfast support for Sri Lanka's ongoing debt restructuring process and its economic recovery efforts, he disclosed.

The implementation of UPI in Sri Lanka will be expedited soon while this digital payment system is to extend enhanced accessibility and security for transactions between the two countries, he added.